Europe, Australasia, Far East – EAFE

Posted in Finance, Accounting and Economics Terms, Total Reads: 325

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Definition: Europe, Australasia, Far East – EAFE

EAFE is an acronym for Europe, Australasia and Far East. It is used to refer to the geographical area in these three regions. This area basically depicts the most developed regions in the world outside of the North America.

An index fund called the MSCI EAFE is used for benchmarking the performance of the North American indexes. This fund comprises of the companies that are listed in the EAFE area. This index is weighted on market capitalization, which means that the stocks with high market capitalization is weighed higher than those with lower market capitalization regardless of the price at which they are trading.